Pending Home Sales Retreat in April, But Above Year Ago

Pending home sales pulled back in April after three consecutive monthly gains, recording the biggest drop in a year.
But pending sales based on contract signings are higher than a year ago, according to the National Association of Realtors.
Nonetheless, the retreat in contracts reflects a still uneven housing market recovery.
The NAR’s Pending Home Sales Index declined 5.5 percent to 95.5, from a downwardly revised 101.1 in March.
But it is 14.4 percent above April 2011 when it was at 83.5.  The data reflects only contracts – not closings.
The one-month setback does not change the fundamentally improving housing market conditions, said Lawrence Yun, NAR chief economist.
“Home contract activity has been above year-ago levels now for 12 consecutive months,” he said. “The housing recovery momentum continues.”
The NAR’s forecast has been upgraded, with existing-home sales expected to reach 4.66 million this year, compared with 4.26 million in 2011.
The outlook for 2013 is now 4.92 million, but could vary significantly depending on two scenarios.
If lending returns to normal, the 2013 outlook for existing-home sales would measurably improve to 5.3 million, the NAR said.
“However, a fiscal cliff scenario of higher taxes and sharp spending cuts beginning in early 2013, which is an unlikely event but still worth noting, would lower the sales projection to 4.5 million,” the NAR said.
The forecast for home prices has been upwardly revised because of lower inventory supplies, with the median existing-home price projected to rise 2 to 3 percent this year, and 4 to 5 percent in 2013, Yun said.

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